Communities Cope With Shrinking Public Sector Budgets

Springfield, Mass.-Conn. Had Largest Percentage Decline, Chicago-Joliet-Naperville, Ill. Lost the Most Jobs; Bakersfield-Delano, Calif. and Los Angeles-Long Beach-Glendale, Calif. Are Top Gainers

Construction employment declined in 165 out of 337 metropolitan areas between July 2011 and July 2012, increased in 123 and was stagnant in 49, according to a new analysis of federal employment data released today by the Associated General Contractors of America. Association officials said that the new data comes out as many metro areas continue to struggle with constricting public sector budgets and uneven private sector growth.

“Construction employment is healthy in the handful of areas where private sector demand is on the rebound,” said Ken Simonson, the association’s chief economist. “However, construction employment in most metro areas is suffering from the effects of tepid private sector demand and shrinking public sector construction budgets.”

Association officials cautioned that the growth in private sector construction activity taking place in some areas could be undermined by the threat of drastic tax increases next year. They urged Congress and the administration to work together to provide tax certainty while addressing chronic funding challenges for key infrastructure programs.

“Construction employment will suffer a significant blow if Washington gridlocks its way to another recession,” said the association’s chief executive officer, Stephen E. Sandherr. “Setting our fiscal house in order in a way that provides employers with predictable tax rates while allowing for needed infrastructure investments will boost employment in construction and many other sectors.”